Despite Strong HANA Launch, SAP Sales Come Up Short

Days after a significant product launch that included events on three continents, German software company SAP reported preliminary results showing sales that fell short of the expectations of analysts.

SAP shares fell more than 4 percent as the company reported revenue came in at €5.02 billion ($6.7 billion), constituting an increase of about 9 percent year-on-year. Operating profits were €1.59 billion. Since the results were preliminary, the company didn’t report net profits. That disclosure will come on Jan 23.

The sales results missed the mark that analysts had been expecting: Sales of €5.13 billion and an operating profit of €1.95 billion.

The new HANA product that was the focus of the big launch last week moves business data into memory chips and off spinning hard drives, thus making access to that data more immediate. The company has been working on a transition from its existing suite of on-premise software applications for businesses for several years and announced the completion of the process last week. And while sales of HANA were stronger than expected at €194 million, they still make up a relatively small slice of SAP’s overall revenue pie.

Also, last week co-CEO Jim Hagemann Snabe said without elaborating that the company’s medium-term guidance will be revised upward. Currently the company expects to report annual sales of €20 billion by 2015.

SAP competes closely with software giant Oracle as well as with certain cloud-based software companies including Netsuite, Salesforce.com and Workday.

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